The department has already carried out preliminary investigations, which point to possible tax evasion by these entities, these people said. The investigation wing, which is the enforcement arm of the income tax department, has been lying low since the retirement of its director-general BP Gaur in January.

The government did not appoint a full-time director general of investigation until last month when K Swatantra Kumar was named as Gaur's replacement.

Income tax officials said Kumar's appointment is expected to fire up the investigation wing in Mumbai, which had detected tax evasion to the tune of Rs 3, 400 crore last fiscal.

Over the past two years, the department has carried out raids on companies involved in construction, infrastructure, pharmaceuticals, engineering, steel manufacturing and shipping. The investigation wing also targetted garment makers, hospitals, power companies, toll-collecting agents, and contractors engaged in road repairs and school construction work.

According to officials, companies evading taxes usually do it by suppressing their profits by falsely inflating expenses. There are operators who thrive on supplying bogus purchase bills for a commission, which ranges from half to 1% of the amount generated through fake bills.

The income tax department carries out searches whenever it obtains information about under-reporting of income and evasion of tax. An official said there are checks and balances within the system, and action is initiated only when there are reasonable grounds to suspect tax evasion.